Back-to-School: Consumers Spending Less in 2015

It’s that time of year again– Back-to-School. Parents and children everywhere have started the back-to-school preparation, examining their needs and determining what to buy. However, with the average family spending down to a predicted $630.36 this year from last year’s $669.28 [1] and those spending patterns changing, retailers are being forced to adjust their back-to-school marketing and promotions and evaluate new ways to get consumers to the register.

This year, parents are looking to buy what their kids really need. The number of consumers who plan to reuse last year’s items has risen from 26% to 39% between 2011 and 2015.[2] For example, in 2014, 58.3% of parents said they would buy electronics for their children, a spending average of $212.35. With less of a need for electronics this year, families have expectedly said they will be decreasing their spending on electronics, with the average dropping to $197.24. While these fluctuations are expected, they still mean lower consumer spending for retailers this year. [3]

Another issue that retailers are seeing is that timing is not of the essence for many families anymore, with 38% of parents surveyed by Deloitte saying the back-to-school season is less important to them because they replenish supplies throughout the year and feel less need to stock up. Additionally, 31% of parents surveyed plan to take their time finishing their shopping lists and plan to complete their back-to-school shopping after the start of the year. [4]

With a confident consumer who buys based on need and is not rushed to make a purchase, shoppers are arriving at stores mission-driven with the decision of what to buy being made before even going to the store. Consumers are no longer exclusively driven by promotions and discounts. Another component is that many back-to-school shoppers are bypassing the in-store shopping experience altogether. Busy parents are moving their purchases to online, choosing to either buy online, pick up in the store or ship to the store. Regardless of the option they choose, parents are using retailers’ omnichannel services to research online before making a purchase.

So, if consumers aren’t buying exclusively in July or August, are content with what they already have and promotions no longer get them to the stores, how do retailers capture sales? According to Alison Paul, Deloitte LLP vice chairman and retail and distribution sector leader, “…retailers will have to provide something more meaningful or exclusive that fits their customers’ needs when they are ready to buy.”
Market Track says many retailers are increasing specific ad messaging to target back-to-school stakeholders and trying to influence multiple audiences across traditional and emerging media. Companies like Amazon and Target have created new mid-year “Black Friday” type events that are in synch with back-to-school, taking the excitement they bring to Black Friday and applying it to promotional events during the summer. Macy’s, Walmart and Office Depot have begun to open conversations with different segments of back-to-school shoppers to differentiate their message, such as Macy’s tailored messaging campaign to students called “The Text” campaign. To create urgency in the consumer, Market Track predicts retailers will offer specific back-to-school in-store and online events.[5]

With consumers coming into retail locations ready-to-buy this back-to-school season, it is more important than ever that consumer brands and retailers eliminate blind spots. Gigwalk can help by exposing the common and costly inaccuracies in retail execution like out-of-stocks, pricing discrepancies and promotional display and planogram non-compliance. We can get you real-time intelligence about what’s happening in the store to ensure retail sales are maximized.